Russian oil purchase allowed… for now — Scott Bessent announces ‘short-term’ licence as crude prices rise amid Iran war

US Treasury Secretary Scott Bessent on Thursday (local time) announced a temporary authorization for nations to purchase Russian oil stranded at sea in a bid to contain skyrocketing oil prices in the wake of the war between US-Israel and Iran.

Stating that US President Donald Trump was "taking decisive steps to promote stability in global energy markets and working to keep prices low", Bessent said that that the measure announced was "short-term" and applied to only oil stranded at sea.

‘Will not benefit Russian government’

"To increase the global reach of existing supply, [US Treasury Department] is providing a temporary authorization to permit countries to purchase Russian oil currently stranded at sea," said Bessent.

"This narrowly tailored, short-term measure applies only to oil already in transit and will not provide significant financial benefit to the Russian government, which derives the majority of its energy revenue from taxes assessed at the point of extraction," he added.

Bessent also claimed that the temporary rise in oil prices would result in massive gains for the US in the long-run.

“The temporary increase in oil prices is a short-term and temporary disruption that will result in a massive benefit to our nation and economy in the long-term,” the US Treasury Secretary said.

Key details of the new licence

The new Russia-related general licence announced by Bessent allows the sale of Russian crude oil and petroleum products loaded on vessels through April 11, according to the Treasury Department website.

Notably, oil produced by sanctioned Russian entities are also allowed to be purchased under the present licence.

“Russian Federation-origin crude oil and petroleum products subject to this general license include those produced by entities sanctioned under the Russian Harmful Foreign Activities Sanctions Regulations, 31 CFR part 587, or the Ukraine-/Russia-Related Sanctions Regulations, 31 CFR part 589,” the document on the US Treasury Department website said.

The licence, which covers oil and petroleum products loaded on vessels as of March 12, comes a day after the US Department of Energy announced that Washington would be releasing 172 million barrels of oil from the strategic petroleum reserve in an effort to curb rising oil prices in the wake of the war in Iran.

That release was part of a broader commitment by the 32-nation International Energy Agency to release 400 million barrels of oil, reported Reuters.